Engaging customers: after all, they foot the bill

D-Tech panel explores the vagaries of communicating value

Today, folks, it's the airport dash from friendly San Antone back to Denver. I'll just share a few vignettes of a panel from Tuesday. And when I stop moving I'll share more details from DistribuTech.

"When the power is on, it's hard to get our customers' attention," said Bruce Carpenter, vice president, distribution services, Portland General Electric, setting the baseline for "moving the needle" with customers' attention to utility initiatives.

Advanced metering infrastructure (AMI) has resulted in speeding up restoration of service when that power goes out, and that should be a core value proposition, Carpenter suggested. PGE, which completed its AMI rollout in August 2010, has also cut truck rolls, another of the oft-cited benefits of advanced metering.

(PGE has about 850,000 customers, spread over 4,000 square miles of service territory that rises from sea level to the shoulders of Mount Hood.)

Yet customers may have other things on their mind. Carpenter recalled that PGE's customer base had up to 500 customers eligible for disconnection every day when the recession hit in 2008. Today? Up to 2,000 customers a day are eligible for disconnection. (A PGE spokesperson subsequently clarified that, despite these numbers, PGE rarely disconnects more than 300 customers per day, as it offers payment plans or help with energy assistance programs.) And that puts PGE between a rock and a hard place, he said.

"We have a lot of difficult conversations with our public utilities commission and consumer advocacy groups," Carpenter said. "They beat you up for letting bills get too high, then they beat you up for cutting them off."

Charles Dickerson, the mastermind of customer policies at Pepco Holdings Inc., shared another angle. Pepco's strategy when encountering resistance to advanced metering, which is almost complete (and still being optimized) in applicable areas of its multi-state territories in New Jersey, Delaware, Maryland and Washington, D.C., is "don't fight them."

"Engage," Dickerson advised. "Just allow them to refuse."

As for major technology deployments, keep in mind why you're doing it.

"Technology is a means to an end," Dickerson continued. "You can do the technology perfectly, but if customers don't change their behavior, you haven't done anything."

The timely presentation of customer usage data will help with the mission to get customers to modify their behavior, which can aid them in managing costs and the utility in managing operational constraints. One goal for Pepco is to provide its customers with alerts if they've set a monthly budget and their usage puts them on track to exceed that budget, Dickerson said.

Dickerson's personal view is that in-home devices are treated like toys and rapidly go into the kitchen drawer. Instead, why not assume that mobile devices will likely serve the role of energy monitor?

Chris Schein, senior director of communications for Oncor Electric Delivery, first clarified that Oncor is in the business of electron delivery, not retail service.

"If you give customers data, they'll cut their use by 10 percent," he said. "Give them tools, and they'll cut use by 20 percent."

But, he added, "engagement is tough."

"There's a lot of noise out there and it's not good," Schein said. Thus, "our target audience is the early adopter. All new technology depends on the early adopter."

Schein offered a potentially useful factoid: In Texas, surveys have shown, in more than half of his customers' homes, men make the selection of retail provider. The same proportion of women then take over and decide how energy in the home is used.

"They're the CFO of the home," Schein said.

To engage a customer base that's been metered, Oncor held a contest to see who could use the meter data creatively to save energy. The rewards on offer included a Chevy Volt and an array of smart appliances. The winner had reduced his use by 40 percent by matching his load to the overproduction of energy by his solar photovoltaic panels.

In fact, a number of utilities across the country are either in talks with or already engaged in pilot demonstrations with Boulder, Colo.-based Simple Energy, which offers a gaming application that injects fun and competition into energy management.

Comments

Engagement is a two way street

- Jan 26, 2012 - 12:18 PM

If utilities want customers to open up and engage, then utilities must open up first. Because of regulators and investors, opening up is not an easy proposition but it is essential if you expect customers to be more involved in energy decisions. The relationship has been paternalistic for decades. Utilities tell customers what to do (here is your meter, your new rate, etc.) and as long as they pay the bill, no news is good news.

This is not a recipe for engagement. This long lasting pattern can only be broken if utilities open up and I am not sure they are ready. Look at the companies that have highly engaged customers - Starbucks, Zappos, The Gap. They are largely open and transparent and invite customers into their business, even helping to create products, improve the customer experience, and make business decisions. There is a reason for customers to care.

Openness also builds trust. Zappos prints out a book for public consumption that shows how each employee feels about Zappos, and not all of the comments are polished or positive. This builds trust with customers and is the foundation for a relationship. If an organization only communicates polished corporate pablum, today's sophisticated consumer moves elsewhere. Any utilities ready to publish a book on how their employees feel about the organization?

Openess also allows organizations to remove layers of unproductive bureaucracy. Empower lower level employees to intereact directly with consumers. And yes they will make mistakes, but if the organization has opened the kimono, consumers are very forgiving. Moreover, it is an opportunity for the utility to show they can make and remedy mistakes just like every human on the planet. This humanizes the stodgy institution and again builds trust and a relationship with the consumer.

Until utilities can open up, share their success and failures, and truly invite customers into the energy business, there is little chance of engaging customers. The lack of customer engagement is not the fault of the customer, but the organization. And this is in turn highly influenced by the industry and the regulators.

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